Maximize Your Rewards with Cash Back Credit Card Points

Cashback cards are popular because of their straightforward reward structure. If you need groceries, you might as well get a small percentage of cashback. I understand the appeal, but many people don’t realize that you can often convert cash-back rewards into points. Reward points are often redeemed for more than you would get as cash back. More is better, correct?

Chase Ultimate Rewards

I have a family member (my old(er) sister, but don’t tell her I told you) who has been using the Chase Freedom Unlimited for years and assumed the 1.5% cash back was great.  I guess 1.5% is fine but we all deserve better than “fine”, don’t we? What would be great is the travel redemption options that would be possible if she had another Chase credit card, specifically one that earns Ultimate Rewards.  With this combination, the 1.5% cash back turns into 1.5 Ultimate Rewards per dollar. 

I LOVE my Chase points and spend 100% of Ultimate Rewards on Hyatt stays.  My jaw dropped when I learned my sister was sitting on a gold mine of 1 million Chase Ultimate Reward points!  

I am lucky if I earn 300k Ultimate Rewards in a year; she has more than 3 years of points!

I forbid her to cash out and after an intervention, I’m happy to report she and her family will be traveling in style to the UK this summer.

Amex Membership Rewards

I have another family member (my uncle, again don’t tell him) who has been using the Amex Business Platinum for his business expenses, and at Thanksgiving he asked if he should use his 1.5 million points for flights or cash them in for gift cards.

It’s somewhat embarrassing that I have this blog and my family members still don’t understand the value of points.  I will try to look on the bright side and focus on the fact that he knew to ask instead of assuming gift cards were the better option. 

After nearly choking on my turkey, I explained the wonder of Amex Membership Rewards. He and my aunt will enjoy a fabulous round-trip business class flight to Greece this summer, paid for with points.  Lucky! 

What Have We Learned?

Cashback cards offer straightforward rewards based on the amount spent. They allow you to earn a percentage of your purchases back as cash, making them appealing to many consumers.  But if you want to maximize your benefits, especially if you frequently travel or if you want to travel more, you will need to convert the cash back to points. 

How Do You Convert Cash Back to Points?

The answer to how to convert is simple.  You will want to pair your cashback card with a compatible points-earning card. Getting multiple credit cards may sound scary but if you are organized and financially responsible you can handle it. Below is an example of a few card pairings, this list is not all-inclusive.  Feel free to send me a message if you have a question about a specific card pairing.

The Chase Freedom Flex or Chase Freedom Unlimited can be paired with Chase Sapphire Preferred or Chase Ink Preferred.   

The Capital One Sparks card should be paired with the Capital One Venture or Venture X card.

Strategic Spending to Earn Rewards

An additional perk of multiple cards is ensuring that you are not missing out on bonus categories. For instance, some cards offer 5% cash back on categories that are not covered on other cards (examples: home improvement stores, amazon, veterinarian). Taking advantage of these offers can increase your total points earnings.

As I’ve discussed a few times before, identifying your spending habits is crucial for maximizing rewards. Cash back cards are another way to ensure your card strategy leaves no category gaps uncovered. 

Should You Always Convert Cash Back to Points

If I had an unlimited travel budget I would say yes.  Then again, if I had an unlimited travel budget, I wouldn’t give a darn about points. Let me try again to answer. 

I know that I can get better value from my points for flight or hotel redemptions but sometimes free is better than not free. I have cashed out my points for one purpose; to cover the outrageous expense of Disney tickets. This was not an easy decision and one I occasionally still agonize over.       

No matter what anyone says, there is no right or wrong way to use your points.  There are certainly ways to get more value than you can with cash-back options. As long as you don’t agonize over decisions like I do, I am sure whatever decision you make is the right one.

Thanks for reading, friends. Happy travels!